American Equity Investment Life pany(AEL) - 2022 Q2 - Quarterly Report

Financial Performance - Total revenues for the three months ended June 30, 2022, were $121,395, a significant decrease from $1,075,440 in the same period of 2021[12]. - The company reported a net income of $360,576 for the three months ended June 30, 2022, compared to a net loss of $(54,694) in the same period of 2021[12]. - Earnings per common share for the three months ended June 30, 2022, were $3.78, a recovery from a loss of $(0.69) in the same quarter of the previous year[12]. - For the six months ended June 30, 2022, net income was $926,799, compared to $227,990 for the same period in 2021, representing an increase of approximately 307%[24]. - The company reported a net income of $349.7 million for the three months ended June 30, 2022, compared to a net loss of $65.6 million for the same period in 2021[173]. - Net income available to common stockholders increased to $349.7 million in Q2 2022, compared to a loss of $(65.6) million in Q2 2021[200]. - For the six months ended June 30, 2022, net income available to common stockholders rose to $905.0 million from $206.2 million in the same period of 2021[200]. Assets and Liabilities - Total assets decreased from $78,349,109 thousand as of December 31, 2021, to $71,663,266 thousand as of June 30, 2022, representing a decline of approximately 8.6%[8]. - Total liabilities decreased from $72,025,982 thousand to $67,779,880 thousand, a reduction of about 5.2%[8]. - Total stockholders' equity attributable to American Equity Investment Life Holding Company decreased from $6,323,127 thousand to $3,882,217 thousand, a significant drop of about 38.6%[8]. - Cash and cash equivalents decreased from $4,508,982 thousand to $1,287,225 thousand, a decline of approximately 71.5%[8]. - Total investments decreased from $60,376,504 thousand to $54,537,816 thousand, a decline of about 9.7%[8]. - The company reported a total stockholders' equity of $5,172,170 as of June 30, 2022, compared to $5,928,760 at the same time in 2021[20]. - Total stockholders' equity as of June 30, 2022, was $3,883,386, a decrease from $6,323,127 at the end of 2021, reflecting a decline of about 38.6%[24]. Investment Performance - Net investment income increased to $592,308 for the three months ended June 30, 2022, compared to $499,320 in the prior year, reflecting a growth of approximately 18%[12]. - The average yield on invested assets increased to 4.33% for the three months ended June 30, 2022, compared to 3.51% for the same period in 2021[195]. - The investment spread measured in dollars was $362.5 million for Q2 2022, up from $277.2 million in Q2 2021[202]. - The aggregate investment spread improved to 2.64% for the three months ended June 30, 2022, up from 1.95% in the prior year[195]. - Investment income for Q2 2022 was positively impacted by strong returns on partnerships and other mark-to-market assets[202]. Changes in Reserves and Derivatives - Policy benefit reserves decreased from $65,477,778 thousand to $62,280,575 thousand, reflecting a decline of approximately 3.4%[8]. - The company reported a significant change in the fair value of embedded derivatives, with a loss of $2,279,633 for the six months ended June 30, 2022, compared to a loss of $8,700 in 2021[27]. - The fair value of the embedded derivative component of fixed index annuity policy benefit reserves is based on projected policy contract values and minimum guaranteed contract values[70]. - The total liabilities for fixed index annuities - embedded derivatives, net, were $5,836,312,000 as of June 30, 2022[150]. - The net change in fair value of derivatives not designated as hedging instruments for the six months ended June 30, 2022, was $(977,378,000)[159]. Shareholder Activities - The company has repurchased approximately 18.5 million shares at an average price of $34.20 per share since the inception of the share repurchase program[178]. - As of June 30, 2022, the company had $367 million remaining under its share repurchase program[178]. - The company issued $500 million in senior unsecured notes due 2027, bearing interest at 5.0% per year[167]. - The company paid dividends totaling $6.0 million and $4.9 million on Series A and Series B preferred stock, respectively, for the three months ended June 30, 2022[175]. - An additional 6,775,000 shares were issued to Brookfield at $37.33 per share, increasing Brookfield's ownership to approximately 16% of the company's common stock[193]. Credit Quality and Loan Performance - The company maintains a valuation allowance based on estimated expected credit losses, which is believed to be adequate by management[118]. - The allowance for credit losses was $6.2 million as of June 30, 2022, reflecting the company's assessment of potential credit risks[92]. - The company utilizes structured product models to assess potential credit losses, incorporating cash flow projections and security seniority[102]. - The average loan-to-value (LTV) ratio for commercial mortgage loans was 62% as of June 30, 2022, compared to 54% for the previous year[128]. - The company reported no charge-offs for the periods reviewed, indicating stable credit quality[121].